Retail Reporting

WASHINGTON COUNTY, Md. — Everything is happening, it seems, at once at the Valley Mall.

Belk is transforming the former Bon-Ton to be ready in time for October. Tilt Studio is preparing to start work on its half of the former Macy’s/Hecht’s, with having its entrance facing the food court, having direct access from mall shoppers. Onelife Fitness is also starting work on the back half of Macy’s, with all exterior entrances. Regal Cinemas is undergoing a renovation, too. All four are expected to completed in October, according to a presentation by mall owner PREIT.

Meanwhile, B.J.’s Brewhouse (with its space owned by Seritage) is looking like it’s making plenty of progress on the exterior with interior improvements coming soon. That leaves the vacant Sears and the soon-to-be vacant Toys ‘R’ Us as spaces that will be need to be filled.

(Just me completely guessing here, but it might make sense to have the Toys ‘R’ Us space to become a grocery store again. Years ago, it was Martin’s before Martin’s moved to Valley Commons…then moved down the other end of Valley Commons closer to Sam’s Club. Maybe a Sprouts Farmers Market or Lucky’s Market would make sense, offering something different for groceries.)

Permits are starting to show more details of what’s going to be in each space for Tilt and Onelife.

Here’s what’s planned for the 47,237 square-foot Tilt Studio, according to a permit filed with Washington County Permits and Inspections.

New seating area,

Kitchen,

Bowling,

Amusement room

1,100 sq ft mezzanine for lazer tag,

The most interesting part to me is the construction of a “mezzanine” for lazer tag. I guess they have space to build up and knock out the ceiling? There could be more elements in store that aren’t listed, coming later in the construction process.

Permits also show Tilt expects to employee 50 workers and would be open 10 a.m. to 10 p.m., seven days a week.

Here’s what’s expected for the 70,100-square-foot Onelife Fitness, which feels like something between a health club and a theme park:

LaVale, Md. — A freestanding Chick-fil-A restaurant is in the works for the former CiCi’s Pizza in Braddock Square shopping center off of Winchester Road in LaVale.

An agreement for stormwater management devices — of all documents to be filed — reveals that Chick-fil-A and landlord H.B. Libby (as Lavalle Associates LLP) brings truth to the longstanding rumor that the Georgia-based chicken sandwich fast food chain is expanding in LaVale. The document was filed Feb. 5, 2018.

Chick-fil-A does not list the location in its future openings page yet on its website. It’s also uncertain if this means the Country Club Mall location would remain open when the new location opens. From experience, I have seen a franchise owner operate both a mall location and a new freestanding location around the corner in Bradenton, Fla. That mall, DeSoto Square, isn’t as strong as Country Club Mall, and the increasingly empty store spaces and food court prompted the closure. Both locations in LaVale could probably do well if they remain open.

Braddock Square Shopping Center is anchored by Martin’s Food, Kohl’s, Tractor Supply Company and Gabe’s. A Chipotle and other retailers are coming soon in a shell space beside the future Chick-fil-A.

For the uninitiated, a new Chick-fil-A opening means campouts, freebies and people driving from other states to say they’ve been at the new Chick-fil-A.

The first 100 customers that are selected and eligible to participate and that comply with the Official Rules will be awarded a digital offer card that is pre-loaded with 52 Chick-fil-A #1 meals (one meal per week). Each meal contains a Chick-fil-A® Chicken Sandwich, a medium Waffle Potato FriesTM and a medium drink. The card is valid for approximately 12 months from the grand opening date.

Chick-fil-A also operates a free-standing location in Cumberland at 221 Williams St., and a Frostburg State University campus dining location in its Lane University Center, 101 Braddock Road, in Allegany County.

Founded in 1967 by S. Truett Cathy in Hapeville, Ga., the chain now has 2,200 restaurants in 47 states and in Washington, D.C.

As always, Chick-fil-A is closed on Sundays.

Are you looking forward to a new Chick-fil-A in LaVale? Comment below.

WASHINGTON COUNTY, Md. — Valley Mall’s Regal Cinemas will be going small as they go big.

Permits filed with Washington County reveal that the 37,267-square-foot renovation of Regal will mean a reduction of 1,488 seats, down to 1,132 seats from 2,620. All seats aren’t equal, however.

The seat reduction is needed to fit in larger, “luxury reclining seats in a stadium seating format and modernized aesthetics,” as PREIT previously disclosed. For now, it looks like just the seating and projection and sound equipment are getting upgrades. Other locations also received dining upgrades but there hasn’t been any information showing that would be coming to the Valley Mall’s Regal Cinemas.

LaVale, Md. — Chipotle Mexican Grill is now hiring managers for its LaVale restaurant that is expected to open this year.

The restaurant is now advertising openings for a general manager and an assistant manager. Both positions come with medical, dental, 401(k) benefits and semi-annual bonuses, according to the postings. Chipotle will be housed in a renovated space in the Braddock Road Shopping Center, 12101 Winchester Road, that was once home to a U.S. Cellular, among other businesses through the years. This will be Chipotle’s first location in Allegany County.

Once a restaurant advertises openings for management, it will take some time to get them settled in to start hiring cooks and the rest of their staff. Typically when the general manager post is advertised, opening is about 180 days away. That’s what we’re looking at now, at best. Construction and opening seems to be slower than usual.

Chipotle said to check back in early summer for a better idea of when opening could be.

It looks like we still have a bit before our opening. Check back early summer and we’ll probably have a better answer for you!

WASHINGTON COUNTY, Md. — Bruster’s Real Ice Cream will be joining Sardi’s Pollo A La Brasa Chicken in the former Pizza Hut on the corner of Railway Lane and Massey Boulevard.

A building permit filed with Washington County Building Services shows that 100 Railway Lane will be split to accommodate the ice cream shop along with Beltsville-based Sardi’s Chicken.

Bruster’s has been around since 1989 and now has over 200 locations, including in Chambersburg, Pa., and Frederick. Each location is allowed to make up to 24 flavors per day out of its 150 flavor catalog. You’ll find your cones, mixes, sundaes and ice cream cakes here like you would at Dairy Queen or Baskin Robbins. However, the flavors are made in store and not trucked in. The chain is based in Bridgeville, Pa., near Pittsburgh.

The 4,100-square-foot ice cream parlor lists possible hours as 10 a.m. to 11 p.m., seven days a week with 30 employees. Those hours will likely be adjusted according to the season.

(I will never forget the fine folks at the Erie Times-News introducing me to Bruster’s there in the summer of 2006. Couldn’t get enough of it, really and am glad there will be an easier one to get to than Chambersburg and Somerset.)

That announcement would seem to hint that Regal will sign on to extend its lease beyond 2020.

As I mentioned before, Regal is renovating theaters across the country by installing king-sized recliners, upgrading projectors, screens, sound systems and in some places, reducing screens and building a bar lounge. Anything beyond technology upgrades and recliners coming to the Valley Mall will remain to be seen.

The press release also formalized other announcements: Tilt Studio and Onelife Fitness will replace Macy’s and Belk will have an October 2018 opening date. Bon-Ton is already in liquidation mode after the holidays with signs for “all sales final” around the store. They should be closing up shop come February.

Here’s an excerpt from the release covering Tilt and Onelife:

Tilt Studio and Onelife Fitness will occupy the former Macy’s box in a total of 118,000 square feet, bringing differentiated and sought-after uses to the property. These advancements at the area’s dominant regional mall represent PREIT’s commitment to cultivating a diversified mall experience, where shoppers will have access to fashion, fitness, fun and food.

Tilt Studio offers a variety of attractions, including rides, bowling, black light laser tag, black light golf, arcade games and space for parties, groups and private events. Tilt Studio will occupy 48,000 square feet at Valley Mall. Tilt currently operates over 40 locations across the country, however this will be one of only 10 Tilt Studio locations.

Tilt Studio and Onelife Fitness will join Belk, which who will replace the proactively recaptured Bon-Ton store. Belk, which will open October 2018, offers an assortment of national brands and private-label fashion, shoes and accessories for the entire family, along with top-name cosmetics, a wedding registry and southern style for the home.

Again, we are still waiting to see what plays out with the two other big box spaces.

Seritage Growth Properties has not unveiled what it will do with the shuttered Sears space and J.C. Penney’s lease ends in 2019. I would not count Penney’s out at the mall. Penney’s saw a boost in same-store performance across its portfolio for November and December, CNBC reported. If the company can continue its strength on beauty, women’s, kids and new appliance segments, there’s hope for a stronger turnaround.

WASHINGTON COUNTY, Md. — A poultry-loving restaurant with a straightforward name is coming to the North Village Shopping Center in Hagerstown.

Just Chicken filed for building permits to take over Suite 18728 at the shopping center located on the corner of Longmeadow Road and Pennsylvania Avenue, according to county records. The permit describes the eatery as a charcoal chicken restaurant that will be open 11 a.m. to 10 p.m., seven days a week and employ 10 workers. It appears it will go into the space beside AutoZone that’s becoming a restaurant carousel.

There are scant details about Just Chicken. Pecking around online, the only existing restaurant that pops up is a Just Chicken in St. Louis, Mo., and no signs point to the operations being related. When there is more info, it’ll be updated here.

WASHINGTON COUNTY, Md. — An upstart chain of Ohio restaurants will be taking over Tilted Kilt Pub and Eatery’s space soon in the Valley Mall.

Columbus, Ohio-based Rustic Barrel Sport & Tap is showing on its website that it is coming soon to the Valley Mall, listing the same phone number — 301-582-5300—that Tilted Kilt uses. It signals that the days—maybe even as soon as Sunday— could be numbered for Tilted Kilt’s Hagerstown location. The Hagerstown Tilted Kilt is no longer listed on the chain’s website, with Frederick being the closest location. No closing date has been posted, but with the restaurant de-listed from the corporate website, it could be any day now.

An opening date has not been posted, but it will take some time to renovate that space, re-hire existing employees, hire new employees and get the liquor license in order.

Never heard of Rustic Barrel? Neither have I. The chain is brand new, filing for its trademark in April. It should not be confused by similarly named Rusty Bucket, which also is headquartered in Columbus, Ohio. So far, there are locations in Columbus and Canton, Ohio; Florence, Kentucky; Fayetteville, North Carolina; and opening soon in Novi, Michigan, as well as coming soon to Hagerstown.

Rustic Barrel boasts local and national craft beer, plenty of TVs and video walls to watch sports with something called “totchos” on its menu—tater tots with loaded toppings like you’d find on nachos. You’ll also find burgers, salads, sandwiches like the Salmon BLT, flatbread pizzas and full entrees. Check out the full Rustic Barrel menu to see what’s appetizing.

There’s a few moving parts to this takeover. For starters, this isn’t the first time Rustic Barrel is taking over a Tilted Kilt. The Fayetteville (N.C.) Observer, which also saw a Tilted Kilt being taken over by Rustic Barrel, kept track of those takeovers:

On Sept. 9, This Week Community News of Lewis Center, Ohio, reported that a Tilted Kilt in Columbus, Ohio, was being converted into a Rustic Barrel. That also seems to have been the case in Florence, Kentucky, the site of the first Rustic Barrel that opened four weeks ago.

In San Diego, a Tilted Kilt shuttered after the Chargers moved to Los Angeles. In Morgantown, W.Va., a Tilted Kilt closed two years ago in a busy shopping center filled with other restaurants. Yes, it is unusual to see a national chain restaurant see instability to the point of closures and franchisees ready to flip it for something else.

In Annapolis, a corporate-owned location closed in June after losing a lawsuit for unpaid rent at Westfield Annapolis and facing lawsuits from contractors, according to The Capital Gazette.

Tempe, Arizona-based Tilted Kilt is in the category of “breastaurants” as Hooters and Twin Peaks but with kilts, and opened its Valley Mall restaurant in May 2013. It’s been so long that I’ve forgotten that Cafe Rio Mexican Grill opened just the month before beside it, with that quickly shuttering and making way for Primanti Brothers. I’ve only been a couple of times and other than a major football game, it seemed to be dead while other restaurants along the front of the mall were buzzing. The Scottish-themed food wasn’t wooing me either.

PREIT CEO Joseph F. Coradino said in the Thursday earnings call that a lease has been executed with U.S. Fitness Holdings for a 70,000-square-foot gym with an indoor and outdoor pool. Coradino didn’t specify which of US Fitness’ brands but it appears to be Onelife Fitness. US Fitness Holdings operates OneLife Fitness, Sport & Health and Crunch Fitness.

The anchor replacements are part of an overall success for PREIT across its portfolio, being able to quickly fill in shuttered anchors. Coradino said that anchors are in transition at half of PREIT’s malls. The Hagerstown Macy’s closed in 2016.

“We’re leading the way in transforming the anchor landscape,” Coradino said on the earnings call. “This is a longterm business and malls in particular are undergoing a renaissance that we’re excited about.”

Dodge Projects, which collects information from permits and other sources for construction projects, is showing that it will be a Onelife Fitness. Without paying for the full access (it is quite pricey), it’s unclear where that information came from. Sometimes companies will submit the project for listing, other times it will come from a permit scan or sometimes from uncorroborated reports. In any case, the source is noted on the post. Mall employees are also being told that the gym will be a Onelife Fitness.

A mega-sized arcade and a full-fledged health club are part of an industry pivot away from department stores and clothing retailers to entertainment-centric tenants. Valley Mall already saw some of that occur with Primanti Bros., Red Robin, Tilted Kilt, Mission BBQ, Noodles and Company and Starbucks all taking up spaces in the mall and on Valley Mall Road.

That remaining anchor PREIT identified as at Plymouth Meeting Mall between King of Prussia and Philadelphia. Does that mean that Sears already has someone lined up or, is it semantics because the Sears space is owned by Seritage Growth Properties and not PREIT?

Tilt Studio

Tilt Studio is your Dave and Busters consolation prize — and it might turn out to be better. Some locations boast over 100 arcade games, laser tag, black light mini-golf, mini bowling and bumper cars. Each location has a little bit of a different mix of what’s going to be included. Some Tilt Studio are much, much bigger than others.

Coradino said on the call that the Hagerstown Tilt will be 48,000 square feet with bowling, rides and laser tag.

While the graphics look like they are more teen and kid friendly, it will be interesting to see if this becomes an adult hang out, too. Having time to peruse Tilt’s site, every location looks to be a little different. Most have a basic snack bar and have an appearance that is welcoming for elementary school-aged kids.

Then, check out the massive two-story location in Tempe, Arizona. That is 40,000 square feet and includes a craft kitchen and bar instead of a snack bar and this little note:

Our Taproom at Tilt Studio Bar, also located on the second level, features a wide array of popular beers, bottled or on tap, wine by the glass or bottle, specialty alcoholic and non-alcoholic cocktails, and delicious frozen drinks. The Taproom will also be the perfect spot to watch your favorite sporting event on dozens of big screen TVs.

One source has said that mall employees were told it will have a bar, which should appease the 21-35-year-old crowd. Just judging by their websites, you can see how Tilt is more family-oriented than Dave & Buster’s and Round 1 Bowling and Amusement. Certainly, leasing agents and their companies did their homework and figured out why one of the above is better for a certain mall over the other. Let’s see if they got Hagerstown right by choosing Tilt, and what version of Tilt Hagerstown will see.

Here’s a news report on the 2016 opening at Eastwood Mall in Niles, Ohio:

Here’s a video on one of their larger locations in Arizona:

Will Tilt feel the same as the old Playland and Fun World on the north end of town? Will it be better? I need to know.

US Fitness/Onelife Fitness Gym

Onelife is a new player to the fitness world, with only two Frederick locations to its name in Maryland.

CBI:And you immediately launched Onelife Fitness. What was different about those clubs?

KG:We created Onelife as a destination club model—a sports club with all the amenities. A typical facility features racquetball, basketball, several pools, extensive Kid’s Clubs, women-only areas, private yoga and Pilates rooms, and group cycling studios, as well as large group exercise rooms. We wanted clubs that would appeal to everyone, and that, at around $30 a month, would offer unparalleled value.

JOHN GALIANI:And we wanted a brand that we could define, mold, and control. It’s much easier and more comfortable for us to be leading a brand. It’s not that Gold’s Gym lacked anything; we just wanted to go in our own direction.

Mall Performance

Valley Mall’s non-anchor occupancy stands at a strong 98.5 percent at the end of the third quarter, according to PREIT’s report. That’s up 1.4 percentage points from the third quarter of last year. Losing Sears took a hit on the overall numbers with 84.1 percent occupancy, down 14.2 percent just from losing one additional anchor.

I wouldn’t read too much into the comp sales figure. The mall is at $404 per square foot for comparable sales at the end of the third quarter, down from $420 for third quarter 2016. That figure takes into account tenants who are under 10,000 square feet and have occupied the space for at least 24 months. The mall has added several new tenants over the past year that aren’t reflected in these numbers and spaces like H&M wouldn’t be counted for its size.

A couple things to keep an eye on for the future: expiring leases.

PREIT’s earnings report shows that JC Penney’s lease ends in 2019 and Regal Cinemas lease ends in 2020. Typically talks would be underway around now to start renewing the JC Penney’s lease. For example, Bon-Ton’s lease is due to expire in 2018 but PREIT purchased the building in July 2017 and brought in Belk.

Regal is renovating theaters across the country by installing king-sized recliners, upgrading projectors, screens, sound systems and in some places, reducing screens and building a bar lounge. The Hagerstown movieplex could use a refresh if it stays on.

Before they even think of Regal’s renewal, all eyes are on a Sears replacement. The company didn’t share any plans for that space, which is owned by Seritage Growth Properties. Seritage has not made any announcements yet for the 109,000-square-foot space.